Asia Institute - Research Publications
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ItemNo Preview AvailableRumbling of reform in China’s fiscal foundations( 2017-04-17)
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ItemPublic policy for a modernising China: The challenge of providing universal access to education under fiscal decentralisation(OECD, 2019)One of the key inequalities in China today is the divide between urban residents with local registration (hukou) and those without. This chapter examines the historical and systemic causes of this divide between the hukou and non-hukou populations, focusing on the provision of basic education. The limited access to urban schooling for the children of rural migrants is a divisive issue in the debate on citizenship and social rights of migrants, and one with adverse implications for labour markets and intergenerational mobility. This chapter uses the provision of basic education to illustrate how fiscal decentralisation in China – under particular historical circumstances, produced a divisive, rather than inclusive growth outcome. Moreover, even though education policies have shifted over the past two decades to calling for inclusiveness, their impact has to date remained limited, leaving the government with an inequality it does not want and finding very difficult to reverse.
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ItemUsing the Government Financial Reporting Framework to Redraw the State and Market Boundary in China: A Two-Step Approach(The World Bank, 2018)After four decades of remarkable economic achievement under market reforms, the leadership has called for a reset in the boundary between the State and the Market as an important corrective to help China sustain rapid economic growth, by imposing hard budget constraints on government and insulating SOEs from local government predation. This could start with revealing and reviewing the current operation and finance of the government through the new Government financial reporting framework (GFRS). The sheer size of SOEs and their engagement in provision and finance of public goods and services poses great challenge for China to immediately adopt international standard for GFRS. Given their huge size and diverse characteristics, it is neither correct nor practical to include all SOEs in the public sector. We therefore proposed a two-step approach for using the GFRS to redraw the boundary of the state and market. The first step is to adopt an accounting framework that aims to provide a comprehensive count of government operation and finance, focuses on the fiscal impact of entities, and simplifies the reporting requirements for the vast majority of SOEs. The second step is to review the government operation and finance with an economic framework. It is also hoped that the exercise itself will stimulate further reform of SOEs and a rethinking of the division of responsibilities between government and market. While one should not expect to reach a clear and ideal division between the state and market overnight, with successive iterations, the exercise will lead incrementally to greater clarity and improvements, as the process of implementing the GFRS sets off a beneficent cycle for China’s economic transformation to a higher quality and sustainable growth.
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ItemBudget reform in China: Progress and prospects in the Xi Jinping era(ANU Press, 2018)
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ItemFiscal Futures: Will China Offer an Alternative Development Model?(International Budget Partnership, 2019-03-13)Forty years since launching its program of “reform and opening,” China is still going strong as a one-party state. Under the Communist Party’s tutelage, China’s development has diverged from historical patterns whereby growing economic prosperity has led invariably to the rise of democratic institutions, as richer and better educated citizens demand more say in society and government. Rather than becoming more democratic, China has instead become more authoritarian and intolerant. The question we address in this post is whether China’s current path is a temporary detour, or if it represents the emergence of a new development “model” that the Chinese government is touting. We argue that the results-based, pragmatic approach to politics associated with “Chinese-style democracy” may look attractive to countries seeking to kickstart development, but the authoritarian aspect of the model, along with its economic foundations, may be unsustainable even in China where hard tax and spending choices will soon have to be made.
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ItemAn update on fiscal reform(ANU Press, 2018)
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ItemThe financial crisis and the challenge of fiscal federalism in China: The 2008 stimulus and the limits of China's intergovernmental system(Edward Elgar Publishing, 2017-01-27)
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ItemChina's War on Air Pollution: Can Existing Governance Structures Support New Ambitions?(CAMBRIDGE UNIV PRESS, 2017-09)Abstract Unprecedented and highly visible degraded air quality in China's urban centres has prompted a step change in central government control efforts in recent years. This “War on Air Pollution” has included a mixture of administrative controls, regulatory clampdowns, economic incentives and public education campaigns. A critical constraint on how policies are designed and implemented is the central government's capacity to access accurate cost information, and monitor, evaluate and enforce the policies at subordinate levels of government. We examine in detail the directives and arrangements that underpin China's “War on Air Pollution” at the provincial level, taking Hebei province as a case study. Located upwind of Beijing, Hebei's heavy industries have been a particular focus of the environmental policies. The current approach, which requires highly specific and costly local actions, yet allocates funds centrally, suffers from misaligned incentives and does not address longstanding weaknesses in local policy monitoring, evaluation and enforcement.